It often involves an attorney, frequently a trusted family member, who has quietly stopped acting in the principal’s best interests.
What Is Power of Attorney Abuse?
Power of attorney abuse is when an attorney uses their legal authority for their own benefit, or otherwise fails to act in the principal’s best interests.
An enduring power of attorney lets one person (the attorney) manage the financial and legal affairs of another (the principal). Unlike a general power of attorney, it continues even after the principal loses mental capacity.
The abuse can look like outright theft. It can also be gradual: unexplained transfers, mounting unpaid bills, or a sudden reluctance to account for the principal’s money.
The Legal Duty Every Attorney Owes
An attorney owes the principal a fiduciary duty. This is a strict legal obligation to act in the principal’s best interests, keep the principal’s money separate, keep proper records, and avoid any conflict of interest.
Under the Powers of Attorney Act 2003 (NSW), an attorney who uses the power after it has been revoked or suspended, knowing of that revocation or suspension, faces a maximum penalty of five years imprisonment.
Breaching the duty can carry both civil and criminal consequences.
Warning Signs of Power of Attorney Abuse
Financial elder abuse is often hidden in plain sight. The table below sets out the warning signs worth taking seriously.
| Warning Sign | What It Looks Like |
|---|---|
| Unexplained transactions | Large withdrawals, transfers, or spending that does not match the principal’s usual habits. |
| Secrecy around finances | The attorney becomes evasive, or other family members are suddenly shut out of financial information. |
| Sudden changes to documents | A new will, a new beneficiary nomination, or a changed power of attorney that is out of step with the principal’s history. |
| Unpaid bills or neglected care | Despite adequate funds, bills go unpaid or the principal’s care and living standards decline. |
| Isolation | The principal is cut off from friends, family, or their usual advisers by the person managing their affairs. |
| Pressure to gift or guarantee | The principal feels intimidated into gifting money or property, or using their property as security for someone else’s debt. |
Any single sign may have an innocent explanation. Several together, or a pattern over time, is a strong reason to seek advice.
Enduring vs General Power of Attorney: Why It Matters
An enduring power of attorney survives loss of capacity, while a general power of attorney does not. That difference is why the choice of attorney matters so much.
| General Power of Attorney | Enduring Power of Attorney |
|---|---|
| Automatically ends if the principal loses mental capacity. | Remains valid after the principal loses mental capacity. |
| Limited scope for long-term abuse because it lapses on incapacity. | Higher long-term risk, so the choice of attorney and ongoing oversight matter more. |
Getting the structure of the document right at the outset is one of the most effective forms of protection available.
What You Can Do If You Suspect Abuse
- If the principal still has capacity: they can revoke the enduring power of attorney and give formal written notice to the attorney, immediately ending that authority.
- If the principal has lost capacity: the matter can be referred to the Guardianship Division of NCAT, which can review, suspend, or revoke the appointment and appoint a financial manager.
- Report the abuse: contact the NSW Ageing and Disability Abuse Helpline on 1800 628 221, and NSW Police where a crime may have occurred.
- Preserve the evidence: gather bank statements, correspondence, and a timeline of events before confronting the attorney directly.
- Get legal advice early: urgent action is sometimes needed to freeze assets or apply to NCAT before further harm is done.
Why Clients Choose M de Mestre Lawyers
Elder abuse cases require a lawyer who understands both the law and the emotional dynamics of family exploitation.
- MaryAnn de Mestre has made formal submissions to the NSW Parliamentary Inquiry into Elder Abuse and has a long-standing focus on elder abuse prevention.
- She is a sought-after media commentator, featured on ABC Radio, 2SM, and in podcasts including Retire Right and Your Aged Care Compass.
- She is a sessional academic and Convenor of Succession Law at Macquarie University, and a court-appointed expert in estate and professional negligence matters.
- We draft robust powers of attorney to prevent abuse, and act decisively where abuse is suspected, including applications to NCAT and the Supreme Court of NSW.
- We combine strategic, no-nonsense legal action with genuine compassion for families dealing with this kind of betrayal of trust.
As a Northern Beaches firm, we are close to the families we act for, and we treat every suspected case with the urgency it deserves.
Get in Touch
If you suspect a power of attorney is being misused, or you want a robust power of attorney drafted to protect yourself or a loved one, contact M de Mestre Lawyers today.
Phone: (02) 9913 1182
Address: 27/90 Mona Vale Road, Warriewood NSW 2102
Web: www.mdemestrelawyers.com.au
Frequently Asked Questions
How long does an attorney have to keep financial records?
The Act sets no fixed period, but an attorney should keep clear records for the whole time they act and be able to produce them if asked. Keeping the principal’s money in a separate account makes this far easier.
Can an attorney be made to repay money they misused?
Yes. A court or NCAT can order an attorney to compensate the principal or the estate for losses caused by a breach of duty. This is separate from any criminal charge, so an attorney can face both.
Can two attorneys be appointed to watch each other?
Yes. A principal can appoint attorneys to act jointly, so every decision needs both signatures. This adds a built-in check, though it can slow down routine tasks.
What if the attorney lives in a different state?
The appointment is still valid, but distance can make oversight harder. Interstate recognition of NSW powers of attorney varies, so confirm the document will be accepted where the attorney lives or where the principal holds assets.
